MANAMA: Venture Capital Bank (VCBank), a Bahraini Sharia-compliant investment firm, has netted a 45 per cent return after exiting its investment in regional equipment rental service provider Byrne Equipment Rental (BER).
The firm said the total value of the transaction was 217 million Saudi riyals ($58m).
According to Reuters data, Saudi Arabia’s Hanco (75pc) and VCBank (25pc) had partnered to acquire Riyadh-based Byrne for around $163.35m in 2014.
BER operates through two subsidiaries – Byrne Equipment Rental, a provider of equipment and modular units for hire, and Spacemaker, a manufacturer of modular structures in the UAE.
VCBank board member and chief executive Abdullatif Janahi said the move was in line with the strategy to conclude several exits from the investment portfolio during the current fiscal year and coming years.
He said ensuring good returns and enhanced liquidity for investors during highly-challenging economic and market conditions was a priority.
“The board and management are fully cognisant that the coming year will be another highly-testing and largely-unpredictable period for the regional investment banking industry. Challenges include the ongoing impact on investor sentiment due to the economic reforms and fiscal measures being implemented by GCC governments; continued geo-political tensions; and the ability of Opec member states to control crude output and maintain the recent improvement in oil prices,” said Mr Janahi.
“In response,” said the CEO, the firm would continue to adopt a qualitative approach in “post-acquisition management of portfolio companies”.
“This is designed to maximise the value of investment assets and provide investors and shareholders with improved returns. Encouragingly, we have identified additional eligible investments for exit which are earmarked for conclusion in the near term, one of which we hope to announce shortly,” Mr Janahi added.